How position sizing works
Risk dollars = Account × (Risk % ÷ 100)
Cost per contract = Premium × Multiplier (usually 100)
Contracts = floor(Risk dollars ÷ Cost per contract)
This assumes you’re risking roughly the premium paid (common for long options). If you use stops or defined-risk spreads, adjust the “premium” input to your max loss per contract.
Risk management is core to how we trade in SPX Plays. Also see the expected move calculator and trading mindset guide.